India minister ‘quits over graft’

Mr Maran, who belongs to a key ally of the governing Congress party, is the second minister to be embroiled in the scandal over telecoms licences.

His DMK party colleague, former telecoms minister Andimuthu Raja, is already in jail on corruption charges.

The multi-billion dollar scandal has badly hurt the government’s reputation.

India may have lost as much as $39bn in revenue, a sum equivalent to the annual defence budget, the state auditor has said.

Mr Maran is being investigated as part of a broader probe into wrongdoing over a decade.

He has denied allegations that he coerced the founder of the mobile phone firm Aircel to sell off his stake to a firm favoured by the minister.

Prime Minister Manmohan Singh’s second term in office has been hit by a series of corruption scandals that have triggered public anger and paralysed policymaking, diverting the government’s attention from stimulating India’s flagging economy.

Damaged reputation

Mr Maran left the telecommunications ministry in 2007 to be succeeded by Mr Raja and was until Thursday the country’s textiles minister.

India is the fastest growing mobile phone market

Prosecutors have already charged Mr Raja with fraud and forgery in a separate scandal related to the 2008 sale of cellular licences.

That sale, conducted on a first-come, first-served basis, netted India only 124bn rupees ($2.7bn), causing the government to lose billions of dollars in potential revenue.

In May another senior member of the Tamil Nadu-based DMK party to be implicated in the scandal was arrested.

Kanimozhi – a member of parliament and the daughter of the state’s former chief minister M Karunanidhi – denies conspiracy and bribery allegations in relation to the alleged mis-selling of the telecoms licences.

Several top company executives have also been arrested in connection with the so-called 2G case.

The government has been hit by a series of corruption allegations in recent months.

These include a parliamentary cash-for-votes scandal, the resignation of the head of the country’s anti-corruption watchdog after he himself was accused of wrongdoing and alleged financial irregularities at last year’s Commonwealth Games.

India has the world’s fastest growing mobile phone market, with about half a billion subscribers.